Wood dog kennel, when will it ruin your loan?

You wouldn’t think that a wood dog kennel could ruin your home loan,but think again. I went to a home the other day. They had three big dogs. No big deal, right. Wrong. Listing to this story?

So the setting is up in the mountains surrounded by trees. There are neighbors on each side, but they are not too far away. The home offered a main level with a basement. The basement was pretty much unfinished except the basement offered a wood dog kennel in the basement with dog doors installed into the siding so that the dogs could go outside. the owner had a daylight basement.

The owner has an interest in rare dogs, so he had the kennel built in the garage and a fenced area outside. Now for the purposes of the appraisal, the dogs are just hobby dogs and no business operation was going on (at least not that I was aware of or what the owner told me). You’ll be shocked at what I tell you next.

The appraisal goes to the bank and this goes to a smart guy at a desk that is reviewing the paperwork, often known as the bank underwriter. He sees the dog kennel in the home, so he investigates further. He finds out that the dogs are being breed and sold, because he found some recent tax records where the owner claimed the dogs on his taxes as income.

As it turns out, the bank will not loan money for commercial operations regardless of the size of the operation. So even though I state that the dogs are only hobby dogs and there is no commercial operation based on a physical inspection of the property and asking the owner about the dogs, the tax information can’t hide.

So when can a dog kennel ruin your loan? When you have a lender that will not loan money on commercial operations and they find out that the owner just lied to me. Now listen to this.

So now the owners are telling the banks that they don’t have a wood dog kennel in the basement anymore, even though they have crisp, clear photos of every side of the home and every room and the kennel in the basement area. Ouch.

The moral of the story is that if you have a few hobby dogs, that’s just fine, but if you are trying to get a loan when you’re using your home as commercial use in any way, shape or form, you may be mistaken and you will probably be wasting your money on trying to get a loan that the bank is not interested in giving you. Don’t lie. It will save you money in the long run.